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TMI Blog2012 (12) TMI 507X X X X Extracts X X X X X X X X Extracts X X X X ..... cker and J.H. Motwani, Advs. for the Respondent Sahab Singh, Technical Member 1. Out of these two appeals, first Appeal No. E/275/08 is filed by M/s Siemens Ltd. (hereinafter referred to as assessee) and second Appeal No.E/572/08 is filed by the Revenue against the same Order-in-Original No.71-73/COMMR/DIV-IV/AKP/2007-08 dated 30.1.2008. 2. The brief facts of the case are that the assessee is manufacturer of motors and generators falling under Heading No.8501 of the Central Excise Tariff Act, 1985 and availing CENVAT Credit in respect of inputs. Windmill Generators manufactured by them are exempted in terms of Notification No.6/2000-CE dated 1.3.2000 being a non-conventional energy device. The assessee, at the time of clearance of the goods, paid an amount equivalent to 8%/10% of the total price of the exempted final product as envisaged under Rule 57AD(I) of the Central Excise Rules,1944 read with Rule 6(3)(b) of the Cenvat Credit Rules. It was observed that assessee was availing CENVAT Credit on "end shields" and "stator housings" which are exclusively used in the manufacture of exempted windmill generators having capacity of 1000 KV to 1250KV. The other dutiable motors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which are exclusively used in the manufacture of exempted windmill generators. He submitted that both these inputs are used in the manufacture of both dutiable motors and exempted generators and the purported denial of the credit on these inputs is not legal in ambit of law. He submitted that the findings of the Commissioner that dutiable motors were manufactured from May, 2006 only and purported denial of the CENVAT Credit prior to May, 2006 is illogical and illegal as the inputs are common for both dutiable and exempted goods and even if the dutiable goods are not manufactured for some period, it will not mean that the inputs are non-common and there is nothing under the Rule 6 of the Cenvat Credit Rules, which allows the credit on duty paid common inputs only. He also contended that the explanation III of the Rule 6(3)(c) of the Cenvat Credit Rules does not debar them from taking credit of duty paid on the excisable inputs used in the manufacture of exempted final products. He further contended that this explanation was added by a Notification No. 27/2005 dated 16.5.2005, therefore, there is no doubt that credit is admissible to these inputs prior to 16.5.2005. He also pointed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n they have paid 8%/10% of the sale price of the exempted goods to the department. 7. The learned Commissioner (A.R.) appearing for the Revenue submitted that under the provisions of Cenvat Credit Rules, once the goods are exempted, the benefit of CENVAT Credit is not admissible to the assessee and this is the fact on record that assessee was manufacturing the exempted goods upto the period of 2006 and, therefore, the assessee was not entitled to CENVAT Credit on the inputs used by them for manufacture of the exempted goods. He submitted that the Commissioner has dropped the demand mde in the third show-cause notice observing that 'end shields' and 'stator housings' are no longer exclusively used in the manufacture of windmill generators as the assessee has started the manufacture of dutiable windmill generators from May, 2006. This finding of the Commissioner is not proper and legal. He submitted that the adjudicating authority has drawn the conclusion based on the submissions of the assessee, which was verified at the buyer's factory by deputing the Central Excise officer as discussed in para 25 of the Order-in-Original and this conclusion is not proper and cannot be considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iod 1.5.2006 and 31.1.2007. The Commissioner has confirmed the demand for the period 1.10.2001 to 30.4.2006 and dropped the show-cause notice for the period 1.5.2006 to 31.1.2007. 10. The issue involved in these appeals is whether the credit on duty paid on inputs "end shields" and "stator housings" is available to the assessee as these inputs were exclusively used in the manufacture of exempted final products particularly when the assessee has paid 8%/10% of the price of the exempted final products to the department. It is the one of the contention of the assessee that they had started manufacturing dutiable motors of 660KV w.e.f. March, 2006. They contended that they have actually used the stator housings and end shields in the manufacture of 4 dutiable motors of 600KV supplied to M/s Shakti Sugar Mills, Madurai. The use of said inputs was got verified by the Commissioner by deputing officer to the said Sugar Mills. Revenue has stated that the verification done at the buyer's factory is not proper and cannot be considered as having any evidential value particularly when the Commissioner himself was not satisfied with these contentions of the assessee and that is why the Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings was whether 8%/10% of duty is required to be recovered from the assessee. It is not clear from the show-cause notice or the impugned order that what quantum of duty demanded in the impugned show-cause notices, pertains to goods exported under bond. Under the scheme of the Cenvat Credit Rules, the assessee is eligible for taking the CENVAT Credit in respect of inputs even if used in the manufacture of exempted goods, if goods have been exported under bond. Therefore, if any duty has been demanded in respect of inputs used in the manufacture of exempted export goods, the same is required to be excluded from the demand. The Commissioner is directed to quantify the amount of duty involved on inputs used in manufacture of export goods. 14. There is another submission of the assessee that the generators of 1000 KV and 1250 KV have been cleared by them reversing the credit equal to the amount of 8%/10% of price of exempted goods during the relevant period. It is their contention that the said reversal is in excess of total CENVAT Credit taken by them on all inputs used in the manufacture of exempted goods. To prove this fact, they have submitted a certificate from the Cost Acco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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